United States District Court, District of Columbia
FEDERAL TRADE COMMISSION, COMMONWEALTH OF PENNSYVANIA, AND THE DISTRICT OF COLUMBIA, Plaintiffs,
STAPLES, INC. and OFFICE DEPOT, INC. Defendants.
G. Sullivan United States District Judge
before the Court is the motion of the Commonwealth of
Pennsylvania and the District of Columbia (hereinafter
“Moving Plaintiffs”) for attorneys' fees and
costs under Section 16 of the Clayton Act. ECF No. 457. Upon
consideration of the parties' submissions, the governing
statutory and case law, and for the following reasons, Moving
Plaintiffs' motion is DENIED.
February 4, 2015, Staples and Office Depot entered into an
agreement under which Staples would acquire Office Depot. On
December 7, 2015, Moving Plaintiffs joined Co-Plaintiff
Federal Trade Commission (“FTC”) to bring suit to
enjoin the merger. Pls.' Mot. Prelim. Inj., ECF No. 5. On
May 10, 2016, this Court determined that there was a
reasonable probability that the proposed merger would
substantially impair competition and granted Plaintiffs'
motion for a preliminary injunction under Section 13(b) of
the Federal Trade Commission Act, 15 U.S.C. §53(b)
(“FTC Act”). See Fed. Trade Comm'n v.
Staples, Inc., 190 F.Supp.3d 100 (D.D.C. 2016). After
the Court's ruling, Office Depot and Staples abandoned
the merger. Although the FTC is also a plaintiff in this
case, only Moving Plaintiffs seek attorneys' costs and
fees in the combined amount of $176, 095.44.
Section 16 of the Clayton Act
1941, Congress passed the Clayton Act to address provisions
not covered by the Sherman Act, such as mergers and
acquisitions. See 15 U.S.C. §§ 12-27. In
1976, Congress amended Section 16 of the Clayton Act, to
provide that “[i]n any action under this section in
which the plaintiff substantially prevails, the court shall
award the cost of suit, including a reasonable attorney's
fee, to such plaintiff.” Hart-Scott-Rodino Antitrust
Improvements Act of 1976, Pub. L. No. 94-435, Title III,
§ 302 (3), 90 Stat. 1383, 1396 (codified as amended at
15 U.S.C. § 26 (1998)). The party seeking attorneys'
fees “bears the burden of establishing entitlement to
an award and documenting the appropriate hours expended and
hourly rates.” Hensley v. Eckerhart, 461 U.S.
424, 437 (1983).
Section 13(b) of the FTC Act
Act expanded the scope of illegal activities in restraint of
trade and provided a path for FTC enforcement of antitrust
laws. See 15 U.S.C. §§ 41-58. Section
13(b) of the Act empowers the FTC to seek a temporary
restraining order or preliminary injunction in a federal
district court if the Commission believes “any person,
partnership, or corporation is violating, or is about to
violate, any provision of law enforced by the Federal Trade
Commission.” 15 U.S.C. § 53(b). Unlike the Clayton
Act, the FTC Act does not grant attorneys' fees to
prevailing plaintiffs. See generally id.
parties disagree on two principal issues: (1) whether Moving
Plaintiffs are entitled to attorneys' fees and reasonable
costs; and (2) if so, whether the calculated amounts that
Moving Plaintiffs have presented to the Court are reasonable.
Plaintiffs rest their argument for attorney's fees and
costs on the theory that this Court's entry of the
preliminary injunction that halted the Staples and Office
Depot merger established that the Plaintiffs
“substantially prevailed in this litigation”
under Section 16 of the Clayton Act. Pls.' Mot., ECF No.
457 at 5. Moving Plaintiffs assert that the preliminary
injunction “is the functional equivalent of a final
judgment in this matter” because the Plaintiffs
achieved the relief they ultimately sought -- i.e.,
nonconsummation of the Staples and Office Depot transaction.
Id. at 4. Moving Plaintiffs further claim that the
attorneys' fees and costs they seek are reasonable in
nature. See id. at 6-7.
contend that Moving Plaintiffs are not entitled to any fees
and costs, characterizing the relief Moving Plaintiffs seek
as an “unprecedented windfall.” Defs.'
Opp'n, ECF No. 470 at 1. Highlighting the fact that this
case was never litigated under Section 16 of the Clayton Act,
Defendants argue that Moving Plaintiffs are not entitled to
any shifting costs or fees “as a matter of law because
they did not litigate, much less substantially prevail, under
the more demanding Section 16 standard.” Id.
Instead, according to Defendants, the parties only litigated,
and the Court only granted, relief relating to the FTC's
claim for a preliminary injunction under the standard set
forth in Section 13(b) of the FTC Act. Id. at 2.
Defendants further contend that even if the Court assumed
that Moving Plaintiffs were entitled to attorneys' fees
and costs under Section 16 of the Clayton Act, Moving
Plaintiffs' calculation is unreasonable and excessive. In
response, Moving Plaintiffs argue that they have satisfied
the four-part preliminary injunction standard set forth in
Section 16 of the Clayton Act and maintain that their
calculated fees are reasonable. Pls.' Reply, ECF No. 471
initial matter, the Court need not examine whether the costs
presented by Moving Plaintiffs are reasonable because the
Court finds that Moving Plaintiffs are not entitled to
attorneys' fees and costs as a matter of law. Section 16
of the Clayton Act provides for attorneys' fees and costs
“[i]n any action under this section in which
the plaintiff substantially prevails[.]” 15 U.S.C.
§ 26 (emphasis added). Plaintiffs insist that the term
“prevail” is not restricted to final judgments.
Pls.' Mot., ECF No. 457 at 3. While this may be correct,
see Mahr v. Gagne, 448 U.S. 122, 129 (1980), Moving
Plaintiffs ignore the remaining text of Section 16. Here,
Moving Plaintiffs did not prevail, much less
“substantially prevail, ” under the Clayton Act.
Instead, this Court granted Plaintiffs' request for a
preliminary injunction under Section 13(b) of the FTC Act.
Staples, 190 F.Supp.3d at 114 n.7 (distinguishing
the Section 13(b) standard from the traditional preliminary